New vehicle sales in Indonesia declined by almost 15% to 76,800 units in March 2020 from already weak year earlier sales of 90,189 units, according to member wholesale data compiled by industry association Gaikindo, as the impact of the global the COVID19 pandemic on the country's economy continued to escalate.

In midMarch, the Indonesian government began to take more concrete action to help slow the spread of the coronavirus in the country. Only essential businesses such as food, healthcare, banking, utilities and transportation are now allowed to operate in many parts of the country, including the capital city Jakarta, albeit with certain safeguards in place.

International travel has been severely restricted while tighter restrictions on domestic travel are being considered and companies have been encouraged to allow staff to work from home where possible.

Millions have already lost their jobs, however, leaving many households without significant income.

The government has implemented a number of fiscal and poverty alleviation policies to help mitigate the effects of the pandemic while Bank Indonesia has cut its benchmark interest rate by 25 basis points in both February and March to 4.5%. It also lowered its reserve requirement of local banks to help provide additional liquidity to the economy.

Overall vehicle sales in the first quarter of 2020 were down by just 6.7% at 236,825 units from weak year earlier sales of 253,863 units although much sharper declines are expected from April onwards.

Sales of passenger vehicles fell by 4.5% to 183,638 units in the three-month period, with sales supported by increasingly attractive finance packages and promotional activity by dealers, while commercial vehicle sales fell by over 13% to 53,187 units.

Toyota reported a 2.5% decline in first quarter wholesale volumes to 75,363 units while Daihatsu sales dropped by 5.1% to 48,113 units; Honda 36,218 units (+25.6%); Mitsubishi Motors 24,572 units (-30.9%); and Suzuki 24,210 units (+5.9%).

Toyota, Suzuki and Honda have suspended local production for two weeks from 13 April to offset falling domestic retail demand and exports.